Spending on wide variety of goods and services boosts economy
By Jeffry Bartash, MarketWatch
WASHINGTON (MarketWatch) — Americans splurged on a wide range of goods and services for the third straight month, suggesting the U.S. economy is growing somewhat faster than expected.
Consumers increased spending in virtually every category, whether at online stores or traditional bricks-and-mortar retailers. Automobiles, electronics and appliances, building materials, and clothing stores saw the biggest gains.
Retail sales climbed 0.8% in March, the Commerce Department said Monday, following revised increases of 1.0% in February and 0.7% in January. February’s gain was revised down slightly and January was revised up a tick.
Consumer spending accounts for as much as 70% of U.S. economic growth, so the recent upsurge in spending likely means the nation’s growth in the first quarter will be faster than expected.
While sales at resurgent automobile companies jumped during the first quarter, other retailers also benefited. Sales excluding the U.S. auto sector were still up a sharp 0.8% last month.
Economists surveyed by MarketWatch expected retail sales to rise by 0.4% overall, or by 0.6% excluding the automobile sector.
Spending has been fueled by an acceleration in U.S. hiring since last fall. With more people working, there’s more money to spend. Retailers have also been helped by one of the warmest winters in decades.
Whether consumers can continue to spend at their current pace, however, remains to be seen. Inflation-adjusted wages have actually fallen over the past year, and Americans are saving somewhat less.
In March, sales of building materials and garden equipment jumped 3% to mark the biggest increase in almost a year and a half.
Sales also rose 0.9% for auto and parts dealers, 1.1% for sellers of home furnishings, 1% for electronic and appliance stores and 0.9% for apparel retailers.
Although consumers did have to spend more money to fuel their cars — sales leaped 1.1% at gas stations — it did little to deter them from spending on other things. The only retail segment to post a drop in sales was health and personal-care stores. Sales dipped 0.2% last month.
Overall retail sales are 6.5% higher compared with a year ago.
Jeffry Bartash is a reporter for MarketWatch in Washington.
